Leases for industrial property (such as a warehouse) are very important because several other aspects of the business (such as its future needs) impact whether or not you should renew a lease or move to another property. This article discusses some key reasons why you should start thinking about the expiry of your industrial lease as soon as possible.
Consideration of Your Needs
You need several months to evaluate what your needs are. For example, you need to assess how much of the leased space has been used effectively. If a small proportion of the space was used, you may consider cutting the amount of space that you lease when you renew your lease or look for an alternative property to lease. You also need ample time to consider the strategic direction of your business. For instance, it will be easier for you to decide to renew your current lease if the business is expanding into a new territory and you don't need extra warehouse space at your current location.
Leverage over the Landlord
A person starting lease renewal negotiations a year in advance may have greater leverage over the landlord when compared to another who holds the negotiations a few months to the expiry of the lease. This leverage can take several forms. For example, there may be other industrial properties available that you can lease in case the current property owner is hiking your lease fees beyond what you are willing to pay. Some property owners may also offer a concession in case you decide to extend your lease long before it expires. Thus, it pays to begin thinking about industrial leasing options way before your lease is due to expire.
You Avoid the Pitfalls of Engaging Several Agents
Another key benefit of thinking about the expiry of your lease early is that it helps you to give your preferred industrial real estate agent ample time to find an ideal property for you. Last minute decisions about the lease may compel you to engage several agents. This may cause reputable agents to stop working for you once they learn that other agents are handling your matter. The engagement of several agents may also create unnecessary activity in the real estate industry in your area. This can create a false impression of high demand for industrial properties. That false high demand can lead property owners to set high lease fees or stringent terms due to the impression that several clients are competing for the property.
As you can see, it is advisable for you to avoid waiting until the last minute to the expiry of your industrial lease before you start considering your next step. Begin the process early and you will enjoy the benefits above.